{"id":755544,"date":"2023-05-05T07:39:02","date_gmt":"2023-05-05T11:39:02","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/cnh-industrial-reports-record-first-quarter-2023-results\/"},"modified":"2023-05-05T07:39:02","modified_gmt":"2023-05-05T11:39:02","slug":"cnh-industrial-reports-record-first-quarter-2023-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/cnh-industrial-reports-record-first-quarter-2023-results\/","title":{"rendered":"CNH Industrial Reports Record First Quarter 2023 Results"},"content":{"rendered":"
\n

\n Q<\/strong>
\n 1<\/strong>
\n C<\/strong>
\n onsolidated<\/strong>
\n revenues of $<\/strong>
\n 5,342<\/strong>
\n m<\/strong>
\n illion (up <\/strong>
\n 15<\/strong>
\n % compared to Q<\/strong>
\n 1<\/strong>
\n 202<\/strong>
\n 2<\/strong>
\n ) <\/strong>\n <\/p>\n

\n Net income of $<\/strong>
\n 4<\/strong>
\n 86<\/strong>
\n million<\/strong>
\n and<\/strong>
\n Adjusted Net Income of $<\/strong>
\n 475<\/strong>
\n million, with <\/strong>
\n diluted EPS<\/strong>
\n and <\/strong>
\n adjusted diluted EPS of <\/strong>
\n $<\/strong>
\n 0.35<\/strong>
\n (<\/strong>
\n adjusted diluted EPS of <\/strong>
\n $0.2<\/strong>
\n 8<\/strong>
\n in Q1 2022)<\/strong>\n <\/p>\n

\n Net cash <\/strong>
\n used<\/strong>
\n by<\/strong>
\n operating activities of $<\/strong>
\n 701<\/strong>
\n million <\/strong>
\n and<\/strong>
\n Industrial<\/strong>
\n F<\/strong>
\n ree <\/strong>
\n C<\/strong>
\n ash <\/strong>
\n F<\/strong>
\n low<\/strong>
\n absorption<\/strong>
\n of $<\/strong>
\n 673<\/strong>
\n million <\/strong>\n <\/p>\n

\n Net sales for <\/strong>
\n I<\/strong>
\n n<\/strong>
\n dustrial <\/strong>
\n A<\/strong>
\n ctivities <\/strong>
\n of <\/strong>
\n $<\/strong>
\n 4,776<\/strong>
\n million (up $<\/strong>
\n 596<\/strong>
\n million compared to Q<\/strong>
\n 1<\/strong>
\n 202<\/strong>
\n 2<\/strong>
\n )<\/strong>\n <\/p>\n

\n Net s<\/strong>
\n ales guidance <\/strong>
\n for FY<\/strong>
\n 2023 <\/strong>
\n updated<\/strong>
\n to <\/strong>
\n an increase of <\/strong>
\n 8<\/strong>
\n –<\/strong>
\n 11<\/strong>
\n % <\/strong>
\n vs.<\/strong>
\n 2022 <\/strong>
\n on <\/strong>
\n strong N<\/strong>
\n orth <\/strong>
\n A<\/strong>
\n merica<\/strong>
\n row crop demand,<\/strong>
\n continued<\/strong>
\n pricing <\/strong>
\n strength <\/strong>
\n and a <\/strong>
\n solid<\/strong>
\n order backlog<\/strong>\n <\/p>\n

\n Financial results presented under U.S. GAAP<\/em>\n <\/p>\n

\u201cI am incredibly proud of our team for again delivering record results as demand for large Agriculture equipment remains robust and we are escalating production to meet customer needs. Our Construction performance is progressing well, especially in North America where backlog supports continued growth. We announced three key acquisitions this quarter, bolstering our strong precision agriculture and alternative fuel portfolios. Our lean enterprise and strategic sourcing programs are creating a simpler, more effective company. These and other investments are making us better for our customers, strengthening my conviction that our future is bright.\u201d<\/p>\n

\n Scott W. Wine<\/strong>, Chief Executive Officer<\/strong><\/p>\n

\n 202<\/strong>
\n 3<\/strong>
\n F<\/strong>
\n irst<\/strong>
\n Quarter Results<\/strong>\n <\/p>\n

(all amounts $ million, comparison vs Q1 2022 – unless otherwise stated)<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n US-GAAP<\/strong>\n <\/td>\n<\/tr>\n
\u00a0 <\/td>\n \u00a0 <\/td>\n\n Q<\/strong>
\n 1<\/strong>
\n 202<\/strong>
\n 3<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n\n Q1 2022<\/strong>\n <\/td>\n \u00a0 <\/td>\n\n Change<\/strong>\n <\/td>\n\n Change at <\/strong>
\n c.c<\/strong>
\n .<\/strong>
\n
\n (<\/strong>
\n <\/sup>
\n
\n 2<\/strong>
\n <\/sup>
\n
\n )<\/strong>
\n <\/sup>\n <\/td>\n<\/tr>\n
Consolidated revenue <\/td>\n \u00a0 <\/td>\n\n 5,342<\/strong>\n <\/td>\n \u00a0 <\/td>\n 4,645 <\/td>\n \u00a0 <\/td>\n\n +<\/strong>
\n 15%<\/strong>\n <\/td>\n		\n +<\/strong>
\n 17%<\/strong>\n <\/td>\n<\/tr>\n
of which Net sales of Industrial Activities <\/td>\n \u00a0 <\/td>\n\n 4,776<\/strong>\n <\/td>\n \u00a0 <\/td>\n 4,180 <\/td>\n \u00a0 <\/td>\n\n +<\/strong>
\n 14%<\/strong>\n <\/td>\n		\n +<\/strong>
\n 17<\/strong>
\n %<\/strong>\n <\/td>\n<\/tr>\n
Net income <\/td>\n \u00a0 <\/td>\n\n 486<\/strong>\n <\/td>\n \u00a0 <\/td>\n 336 <\/td>\n \u00a0 <\/td>\n\n +150<\/strong>\n <\/td>\n \u00a0 <\/td>\n<\/tr>\n
Diluted EPS $ <\/td>\n \u00a0 <\/td>\n\n 0.35<\/strong>\n <\/td>\n \u00a0 <\/td>\n 0.24 <\/td>\n \u00a0 <\/td>\n\n +0.11<\/strong>\n <\/td>\n \u00a0 <\/td>\n<\/tr>\n
Cash flow from operating activities <\/td>\n \u00a0 <\/td>\n\n (701)<\/strong>\n <\/td>\n \u00a0 <\/td>\n (887) <\/td>\n \u00a0 <\/td>\n\n +186<\/strong>\n <\/td>\n \u00a0 <\/td>\n<\/tr>\n
Cash and cash equivalents(<\/sup>5<\/sup>)<\/sup><\/td>\n \u00a0 <\/td>\n\n 3,213<\/strong>\n <\/td>\n \u00a0 <\/td>\n 4,376 <\/td>\n \u00a0 <\/td>\n\n (1,163)<\/strong>\n <\/td>\n \u00a0 <\/td>\n<\/tr>\n
Gross profit margin of Industrial Activities <\/td>\n \u00a0 <\/td>\n\n 24.4%<\/strong>\n <\/td>\n \u00a0 <\/td>\n 21.4% <\/td>\n \u00a0 <\/td>\n\n +3<\/strong>
\n 00 bps<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n<\/tr>\n
\n NON-<\/strong>
\n GAAP<\/strong>
\n
\n (<\/strong>
\n <\/sup>
\n
\n 1<\/strong>
\n <\/sup>
\n
\n )<\/strong>
\n <\/sup>\n <\/td>\n<\/tr>\n
\u00a0 <\/td>\n \u00a0 <\/td>\n\n Q<\/strong>
\n 1<\/strong>
\n 202<\/strong>
\n 3<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n\n Q1 2022<\/strong>\n <\/td>\n \u00a0 <\/td>\n\n Change<\/strong>\n <\/td>\n \u00a0 <\/td>\n<\/tr>\n
Adjusted EBIT of Industrial Activities <\/td>\n \u00a0 <\/td>\n\n 555<\/strong>\n <\/td>\n \u00a0 <\/td>\n 429 <\/td>\n \u00a0 <\/td>\n\n +126<\/strong>\n <\/td>\n \u00a0 <\/td>\n<\/tr>\n
Adjusted EBIT Margin <\/td>\n \u00a0 <\/td>\n\n 11.6%<\/strong>\n <\/td>\n \u00a0 <\/td>\n 10.3% <\/td>\n \u00a0 <\/td>\n\n +<\/strong>
\n 130 bps<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n<\/tr>\n
Adjusted net income <\/td>\n \u00a0 <\/td>\n\n 475<\/strong>\n <\/td>\n \u00a0 <\/td>\n 378 <\/td>\n \u00a0 <\/td>\n\n +<\/strong>
\n 97<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n<\/tr>\n
Adjusted diluted EPS $ <\/td>\n \u00a0 <\/td>\n\n 0.35<\/strong>\n <\/td>\n \u00a0 <\/td>\n 0.28 <\/td>\n \u00a0 <\/td>\n\n +0.0<\/strong>
\n 7<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n<\/tr>\n
Free Cash flow of Industrial Activities <\/td>\n \u00a0 <\/td>\n\n (673)<\/strong>\n <\/td>\n \u00a0 <\/td>\n (1,059) <\/td>\n \u00a0 <\/td>\n\n +386<\/strong>\n <\/td>\n \u00a0 <\/td>\n<\/tr>\n
Adjusted Gross profit margin of Industrial Activities <\/td>\n \u00a0 <\/td>\n\n 24.4%<\/strong>\n <\/td>\n \u00a0 <\/td>\n 22.2% <\/td>\n \u00a0 <\/td>\n\n +<\/strong>
\n 220 bps<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n<\/tr>\n<\/table>\n

Net sales of Industrial Activities of $4,776 million, up 14.3% mainly due to favorable price realization and higher sales volumes, offsetting more than 2% adverse currency conversion impacts.<\/p>\n

Net income of $486 million, with diluted earnings per share of $0.35 (net income of $336 million in Q1 2022, with diluted earnings per share of $0.24). Adjusted net income of $475 million, with adjusted diluted earnings per share of $0.35 (adjusted net income of $378 million in Q1 2022, with adjusted diluted earnings per share of $0.28).<\/p>\n

Gross profit margin of Industrial Activities of 24.4%, (21.4% in Q1 2022) with improvement both sequentially and versus the same quarter of 2022 in Agriculture and Construction, reflective of positive price realization, partially offset by continued increases in costs.<\/p>\n

Reported income tax expense of $173 million, and effective tax rate (ETR) of 27.6%; the ETR decreased versus the same period in 2022 due to fewer discrete items in the period. The adjusted ETR(<\/sup>1)<\/sup> of 27.9% did not change year-over-year.<\/p>\n

Cash flow used in operating activities in the quarter was $701 million ($887 million in Q1 2022). Free cash flow of Industrial Activities was negative $673 million. Debt of $23.6 billion at March 31, 2023 ($23.0 billion at December 31, 2022).<\/p>\n\n\n\n\n\n\n
\n Agriculture<\/strong>\n <\/td>\n<\/tr>\n
\u00a0 <\/td>\n \u00a0 <\/td>\n\n Q<\/strong>
\n 1<\/strong>
\n 202<\/strong>
\n 3<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n\n Q<\/strong>
\n 1<\/strong>
\n 202<\/strong>
\n 2<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n\n Change<\/strong>\n <\/td>\n \u00a0 <\/td>\n\n Change at <\/strong>
\n c.c<\/strong>
\n .<\/strong>
\n
\n (<\/strong>
\n <\/sup>
\n
\n 2<\/strong>
\n <\/sup>
\n
\n )<\/strong>
\n <\/sup>\n <\/td>\n<\/tr>\n
Net sales ($ million) <\/td>\n \u00a0 <\/td>\n\n 3,927<\/strong>\n <\/td>\n \u00a0 <\/td>\n 3,377 <\/td>\n \u00a0 <\/td>\n +16% <\/td>\n \u00a0 <\/td>\n\n +<\/strong>
\n 19<\/strong>
\n %<\/strong>\n <\/td>\n<\/tr>\n
Adjusted EBIT ($ million) <\/td>\n \u00a0 <\/td>\n\n 570<\/strong>\n <\/td>\n \u00a0 <\/td>\n 426 <\/td>\n \u00a0 <\/td>\n +144 <\/td>\n \u00a0 <\/td>\n \u00a0 <\/td>\n<\/tr>\n
Adjusted EBIT margin <\/td>\n \u00a0 <\/td>\n\n 14.5%<\/strong>\n <\/td>\n \u00a0 <\/td>\n 12.6% <\/td>\n \u00a0 <\/td>\n +190 bps <\/td>\n \u00a0 <\/td>\n \u00a0 <\/td>\n<\/tr>\n<\/table>\n

In North America, industry volume was up 19% year over year in the first quarter 2023 for tractors over 140 HP and was down 16% for tractors under 140 HP; combines were up 116% from a severely disrupted industry in the first quarter of 2022. In Europe, Middle East and Africa (EMEA), tractor and combine demand was down 5% and up 7%, respectively, which included Europe tractor and combine demand down 2% and up 62%, respectively. South America tractor demand was down 6% and combine demand was up 16%. Asia Pacific tractor demand was up 6% and combine demand was down 3%.<\/p>\n

Agriculture net sales were up 16%, due to favorable price realization, higher volume and favorable mix.<\/p>\n

Gross profit margin was a record 26.2%. Favorable price realization across all regions, and higher volume and mix offset higher manufacturing and purchasing costs.<\/p>\n

Adjusted EBIT was $570 million ($426 million in Q1 2022), with Adjusted EBIT margin at 14.5%. The $144 million (or 1.9 p.p.) increase from Q1 2022 was mostly driven by gross margin improvement. <\/p>\n\n\n\n\n\n\n
\n Construction<\/strong>\n <\/td>\n<\/tr>\n
\u00a0 <\/td>\n \u00a0 <\/td>\n\n Q<\/strong>
\n 1<\/strong>
\n 202<\/strong>
\n 3<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n\n Q<\/strong>
\n 1<\/strong>
\n 202<\/strong>
\n 2<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n\n Change<\/strong>\n <\/td>\n \u00a0 <\/td>\n\n Change at <\/strong>
\n c.c<\/strong>
\n .<\/strong>
\n
\n (<\/strong>
\n <\/sup>
\n
\n 2<\/strong>
\n <\/sup>
\n
\n )<\/strong>
\n <\/sup>\n <\/td>\n<\/tr>\n
Net sales ($ million) <\/td>\n \u00a0 <\/td>\n\n 849<\/strong>\n <\/td>\n \u00a0 <\/td>\n 803 <\/td>\n \u00a0 <\/td>\n +6% <\/td>\n \u00a0 <\/td>\n\n +<\/strong>
\n 8<\/strong>
\n %<\/strong>\n <\/td>\n<\/tr>\n
Adjusted EBIT ($ million) <\/td>\n \u00a0 <\/td>\n\n 44<\/strong>\n <\/td>\n \u00a0 <\/td>\n 32 <\/td>\n \u00a0 <\/td>\n +12 <\/td>\n \u00a0 <\/td>\n \u00a0 <\/td>\n<\/tr>\n
Adjusted EBIT margin <\/td>\n \u00a0 <\/td>\n\n 5.2<\/strong>
\n %<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n 4.0% <\/td>\n \u00a0 <\/td>\n +120 bps <\/td>\n \u00a0 <\/td>\n \u00a0 <\/td>\n<\/tr>\n<\/table>\n

Global industry volume for construction equipment decreased in both Heavy and Light sub-segments year over year in the first quarter, with Heavy down 16% and Light down 4%. Aggregated demand decreased 1% in EMEA, increased 2% in North America, decreased 24% in South America and decreased 19% for Asia Pacific (excluding China, Asia Pacific markets decreased 2%).<\/p>\n

Construction net sales were up 6%, driven by positive volume and mix mainly in North America and Europe and favorable price realization; partially offset by lower net revenue from South America, and ceased activities in China and Russia.<\/p>\n

Gross profit margin was 15.9%, up 2.6 p.p. compared to Q1 2022, mainly due to higher volume, improved fixed cost absorption, and favorable price realization; partially offset by higher product costs driven mainly by higher raw material costs and manufacturing costs.<\/p>\n

Adjusted EBIT increased $12 million due to favorable volume and mix and positive price realization, partially offset by higher raw material costs and manufacturing costs. Adjusted EBIT margin at 5.2% increased by 120 bps vs. the same quarter of 2022.<\/p>\n\n\n\n\n\n\n\n
\n Financial Services<\/strong>\n <\/td>\n<\/tr>\n
\u00a0 <\/td>\n \u00a0 <\/td>\n\n Q<\/strong>
\n 1<\/strong>
\n 202<\/strong>
\n 3<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n\n Q<\/strong>
\n 1<\/strong>
\n 202<\/strong>
\n 2<\/strong>\n <\/td>\n		 \u00a0 <\/td>\n\n Change<\/strong>\n <\/td>\n \u00a0 <\/td>\n\n Change at <\/strong>
\n c.c.<\/strong>
\n
\n (<\/strong>
\n <\/sup>
\n
\n 3<\/strong>
\n <\/sup>
\n
\n )<\/strong>
\n <\/sup>\n <\/td>\n<\/tr>\n
Revenue ($ million) <\/td>\n \u00a0 <\/td>\n\n 549<\/strong>\n <\/td>\n \u00a0 <\/td>\n 466 <\/td>\n \u00a0 <\/td>\n +18% <\/td>\n \u00a0 <\/td>\n\n +<\/strong>
\n 19%<\/strong>\n <\/td>\n<\/tr>\n
Net income ($ million) <\/td>\n \u00a0 <\/td>\n\n 78<\/strong>\n <\/td>\n \u00a0 <\/td>\n 82 <\/td>\n \u00a0 <\/td>\n (4) <\/td>\n \u00a0 <\/td>\n \u00a0 <\/td>\n<\/tr>\n
Equity at quarter-end ($ million)(<\/sup>5<\/sup>)<\/sup><\/td>\n \u00a0 <\/td>\n\n 2,346<\/strong>\n <\/td>\n \u00a0 <\/td>\n 2,285 <\/td>\n \u00a0 <\/td>\n +61 <\/td>\n \u00a0 <\/td>\n \u00a0 <\/td>\n<\/tr>\n
Retail loan originations ($ million) <\/td>\n \u00a0 <\/td>\n\n 2,249<\/strong>\n <\/td>\n \u00a0 <\/td>\n 2,139 <\/td>\n \u00a0 <\/td>\n +5% <\/td>\n \u00a0 <\/td>\n \u00a0 <\/td>\n<\/tr>\n<\/table>\n

Revenues were up 18% due to favorable volumes and higher base rates across all regions, partially offset by lower used equipment sales due to diminished inventory levels.<\/p>\n

Net income decreased $4 million to $78 million, primarily due to margin compression in North America, higher risk costs, and increased labor costs, partially offset by favorable volumes in all regions.<\/p>\n

The managed portfolio (including unconsolidated joint ventures) was $24.5 billion as of March 31, 2023 (of which retail was 66% and wholesale was 34%), up $3.7 billion compared to March 31, 2022 (up $4.5 billion on a constant currency basis).<\/p>\n

The receivable balance greater than 30 days past due as a percentage of receivables was 1.4% (1.3% as of December 31, 2022).<\/p>\n

\n 202<\/strong>
\n 3<\/strong>
\n Outlook<\/strong>\n <\/p>\n

North American demand for row crop products is strong. Globally, pricing continues to be resilient, order backlog remains solid and well above 2019 levels. The Company is therefore updating the 2023 outlook for its Industrial Activities<\/strong>:<\/p>\n